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Artificial Intelligence and the U.S-China Tech Duopoly

Artificial Intelligence (AI) is the most significant technological development of our century. Its applications are broad and its effects profound. AI technologies are poised to wipe out an unprecedented 40 percent of all human jobs, and will usher in a flush of innovations, complications and radically new understandings at a breakneck speed. AI is going to change the world.

The geopolitical landscape has already begun to shift accordingly. China and the United States, data-rich countries with thriving tech industries, are poised to become the dual AI giants of the globe.

“The AI revolution will have two engines—China and the United States—pushing its progress swiftly forward.” Kai-Fu Lee said in an interview with the Washington Post. “It is unlike any previous technological revolution that emerged from a singular cultural setting. Having two engines will further accelerate the pace of technology.”

Lee is an AI expert. He is the chairman of Sinovation Ventures and president of its Artificial Intelligence Institute, and was the founding president of Google China. Lee developed the first speaker-independent, continuous speech recognition system as his PhD thesis at Carnegie Mellon.

In his new book “AI Superpowers: China, Silicon Valley and the New World Order” Lee argues that the world of AI has become a “duopoly,” whereby China and the United States drive each other’s innovations further while respectively dominating other parts of the world.

In his Washington Post interview, Lee explains his vision for our geopolitical future during the advent of artificial intelligence. When it comes to AI, Lee appears first and foremost an optimist. He stated that AI has already allowed people to further their knowledge through search engines, connected people who speak different languages through machine translation, and made significant reductions to fraud.

Lee believes AI will personalize and lower the cost of medical care, accelerate education, and automate manufacturing, enabling automated stores and self-driving cars. PricewaterhouseCoopers estimates AI will add $15.7 trillion to the world economy by 2030.

This comes at a cost, which Lee acknowledges. “Taking care of our chores and automating manufacturing, of course, will mean a total disruption of patterns of work and employment. Some estimate as many as 40 percent of current jobs will be lost to intelligent machines.”

Lee states that such a shift is similar to the move from agriculture to manufacturing, last seen during the Industrial Revolution, and that navigating such a massive loss of jobs will be a central global challenge for the next 15 years.

However, Lee’s focus is primarily on the different approaches and strengths of the United States and China, the worlds’ leading AI competitors. The two countries are rich in data, giving them an advantage in AI development.

“Data is the raw material on which AI runs.” Lee explained. “It is like the role of oil in powering an industrial economy. As an AI algorithm is fed more examples of the phenomenon you want the algorithm to understand, it gains greater and greater accuracy.”

Though both countries have a great deal of data, there is a gap between the breadth and depth of the information each country collects. Whereas China’s domestic population using 4G networks is larger than the United States, American Internet companies can bring in their users globally, giving them a wider breadth of data collection. Additionally, American companies are, so far, more adept at accumulating AI-ready data for fast use.

China, however, is unmatched when it comes to the depth of the data it can collect about its users. Chinese companies can thus create a deeper and more multi-dimensional picture of their users, allowing their algorithms to precisely tailor product offerings to each individual. This ability will accelerate AI’s implementation across the landscape of the Chinese economy.

Lee believes that the respective spheres of Chinese and American AI will resemble parallel universes. “ The radically different business model in China, married to Chinese user habits, creates indigenous branding and monetization strategies as well as an entirely alternative infrastructure for apps and content. It is therefore very difficult, if not impossible, for any American company to try to enter China’s market or vice versa. It’s like two different jigsaw puzzles. You can’t take a piece from one and try to fit it into the other — everything is different.”

Yet companies in both countries are seeking forms of international expansion. U.S. companies and their technological infrastructure and methodology already dominate North America, Australia, and Europe. This is a technical empire Lee imagines will continue.

China, meanwhile, is expanding into the markets of South Asia, Africa, and the Middle East. The markets in these regions, where there are lots of people in the low-income bracket, are compatible with Chinese models.

Tech entrepreneurs in Brazil, India, and Indonesia are open to partnerships with Chinese companies, agreements in which Chinese companies share in the upside of investment but do not own the other company outright, injecting money and technical know-how into the less-developed markets.

The global picture of an AI duopoly is striking. “If you were to draw a map a decade from now, you would see China’s tech zone — built not on ownership but partnerships — stretching across Southeast Asia, Indonesia, Africa and to some extent South America.” Lee explained. “The U.S. zone would entail North America, Australia and Europe. Over time, the ‘parallel universes’ already extant in the United States and China will grow to cover the whole world.”

Considering the extent to which AI technology will come to affect the day-to-day operations of human society at a macro and micro level, the differences between Chinese and American AI-based societies will likely be stark, with consequences that are fundamental.

Lee believes Russia is a wild card, and did not rule out the possibility that Europe, a tech colony of the United States, will carve out its own individual approach to AI within the American umbrella.

The Cold War parallels of such a dual world order are obvious. What will it mean to have two technological powerhouses driving alongside one another? Considering the speed at which AI learns and advances, the divide between the U.S. and Chinese world spheres will widen fast, with consequences we cannot readily predict.

Lee, optimistic, does not believe that the AI duopoly will lead to a technological arms race between the superpowers. “An AI arms race would be a grave mistake. The AI boom is more akin to the spread of electricity in the early Industrial Revolution than nuclear weapons during the Cold War.”

Lee said that unlike other sciences, AI experiments can be replicated and shared, diminishing incentive for competition and increasing incentive for sharing knowledge in the interest of expanding the field at large. “In a way, having parallel universes should diminish conflict. They can coexist while each can learn from the other. It is not a zero-sum game of winners and losers.”

Still, the greatest challenges of this emerging world order will be felt by the individual human beings living during the shift to come. Low-skill and low-wage jobs are going to be eliminated, and the ultra-rich stand to make a great deal of money from AI proliferation. Social inequality is going to widen.

“The jobs that AI cannot do are those of creators, or what I call ‘empathetic jobs’ in services, which will be the largest category that can absorb those displaced from routine jobs.” Lee predicted. “A great effort must be made not only to increase the number of those jobs and create a career path for them but to increase their social status, which also means increasing the pay of these jobs.”

If Lee’s prediction is accurate, an American and Chinese AI world order will have a profound effect on global governance, infrastructure, economy, and culture. Consider the lifestyle of an average person living in the year 1900 and 1999 respectively. The 20th century saw an immense shift in the structure of the individual lifestyle and in the larger world order. Expect to experience that level of change two or three times over by 2099.